S'pore a 'critical market' for Qantas

A file photo taken on February 27, 2014, shows Qantas Group chief executive officer Alan Joyce

Despite moving its hub for European flights from Changi to Dubai two years ago, Singapore is still a critical market for Qantas, said the Australian carrier's chief executive officer Alan Joyce.

Singapore plays a key role in supporting Qantas' plans to expand in Asia, where demand for air travel is growing faster than anywhere else.

Mr Joyce said: "Since we separated our European (Dubai) and Asian (Singapore) hub, we've put in a lot more capacity for the Singapore market and made new investments in products and services."

This includes a multi-million dollar passenger lounge which opened at Changi Airport in 2013.

He told The Sunday Times: "We're bringing more passengers into Singapore than ever before. Transit passengers may do a bit of shopping at the terminal but those passengers are not as important as the people getting off in Singapore which have been extremely positive for local tourism and local businesses."

When Qantas resumes flights from Perth to Changi at end-June, after a one-year absence, it will offer 9,150 seats a week from Singapore to Australia.

Before the shift to Dubai, it was selling 6,800 seats a week in the Australia-Singapore market. That number does not include seats that used to be booked for Australia-Europe customers flying through Singapore.

The past two years, Qantas has also retimed its flights to Singapore to make it more convenient for its customers to hop onto flights operated by its budget arm, Jetstar, to other parts of the region.

Transfer traffic makes up about 15-20 per cent of its passenger numbers from Australia to Singapore.

Singapore-based Jetstar Asia - part of the Jetstar group of low-cost carriers under Qantas' umbrella - is 49 per cent-owned by the Australian airline.

Singapore-based analyst Brendan Sobie of the Centre for Asia Pacific Aviation said: "For Qantas, future growth at Changi will be about further leveraging Jetstar Asia connections and also regional connections on other partners, such as Jet Airways to India.

"Indeed Qantas now uses Singapore as a regional hub rather than intercontinental hub. This is a good indication of Changi's shifting role and overall focus.

"As the hubs in the Middle East have grown and as the industry has evolved, Changi has emerged more as a hub for passengers heading to or from Asia rather than a hub for long-haul passengers flying through Asia."

The growth for Changi will be in regional connections, he added.

Qantas can do more to leverage on Singapore as its hub in the region, said Singapore Management University's assistant professor Terence Fan, who specialises in transport. An overnight flight that arrives here early would, for example, allow the airline to maximise connections out of Changi to the rest of the region during the morning peak, he said.

Changi is happy to work with Qantas, which has been "a long-standing and valued partner", to further grow passenger traffic, said the airport's chief executive officer Lee Seow Hiang, in a recent statement to mark eight decades of ties.

For Qantas, Singapore will always be special, Mr Joyce said.

On April 17, 1935, the airline operated Australia's first passenger flight to an international destination. Using a four-engined DH86 aircraft, it flew from Brisbane to Singapore. The journey took four days and involved three overnight stops. The flight marked the start of a relationship that has spanned 80 years.

Mr Joyce said: "Singapore was our first international destination, then our gateway to Europe.

"We moved our European hub to Dubai but our focus on Singapore never relented... Singapore is an extremely important destination in its own right and our current gateway to South-east Asia and other Asian markets."